German car giant Porsche’ shares in Frankfurt’ on Wednesday afternoon after the company issued its second profit warning after a few months hiatus %It lost 4.9 percent of its value. This warning highlighted the possible negative effects of falling sales and rising costs.
Porsche reports group sales revenue for 2024 compared to the previous year %He said it was €40.1 billion, down 1 percent, but said more competitive pricing and personalization options helped limit losses to some extent.
The operating profit of the Group amounted to €5.6 billion last year from €7.3 billion ’ in 2023’; operating sales return as a reflection of shrinking profit margins ’den .1’e down.
In February, the company announced that it would invest €800 million in new hybrid and internal combustion engine models; This move is expected to bring profits this year.
Porsche has confirmed that it plans to lay off about 1,900 people by 2029; In addition to the 2,000 job losses expected immediately after the expiration of fixed-term employment contracts, employees are encouraged to accept severance packages or receive early retirement.
Russ Mould, investment director at AJ Bell, “, said the entire industry was already in a difficult situation due to the disparity between regulations on the transition to electric vehicles and unbalanced demand for electric vehicles among consumers, as well as increased competition from China’ and poor consumer confidence.
Bell added that at “Porsche’, this was further exacerbated by supply chain issues and delays in the launch of new models. “Now tariffs have also been added to the mix, Porsche’nin %It seems even more difficult to reach the 20’ margin target.”
Mold also underlined that focusing on streamlining the company and changing key managers could be good steps for Porsche, but these will not be of much use to the company in the short term.
Volkswagen subsidiary in the long term %Targets sales return of over 20’, but medium-term prospects in a challenging business environment %From 15 to tween the 17th.
Euronews contacted Porsche for further comment.
ChinaWeak demand from ’ continues to negatively impact Porsche’
Along with other luxury German car companies such as Porsche, Audi and Mercedes-Benz, China is feeling the effects of falling demand in ’, where rising living costs are reluctant for consumers to spend on luxury goods.
The company is also facing growing competition from Chinese electric vehicle (EV) manufacturers such as BYD, Geely and SAIC, which have increased their European market share by offering cheaper products with more modern designs and more features in their domestic market.
The decline in demand for electric vehicles across Europe has also affected Porsche’; because relatively high interest rates and inflation continue to put pressure on consumer wallets and trust. This trend has been affected by increasing Chinese competition, and the market value so far this year has been %It also affected other major EV manufacturers, such as Tesla, whose 40’ was wiped out.
Buyers are also increasingly distanced from Tesla’ due to Elon Musk’'s growing involvement in U.S. politics and growing dissatisfaction with his vocal support for far-right figures in Europe’.
